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Gerrit Cole Should Be Paid More in 2016

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Rob Biertempfel posted a report tonight saying Gerrit Cole was upset with his salary, which the Pirates set at $541,000, after initially offering $538,000. The team also threatened to reduce Cole’s salary if he didn’t sign his contract, although for perspective, teams can offer players with zero to three years of service time whatever amount they want, and if the player doesn’t sign, the team can reduce his salary.

The one thing that stuck out to me in the report was that Cole was told that the Pirates had a maximum raise of $7,000 for players who are not eligible for arbitration. This is just not true. I could give a lot of examples from every single year where a player received a raise of more than $7,000, but I don’t need to look past Cole. He went from $512,500 to $531,000 from 2014 to 2015. The league minimum went up $7,500, but even if you remove that, Cole’s increase was more than $7,000.

One thing I did notice when looking over the numbers is that no player has received more than $538,000 from the Pirates prior to this season, with that amount being the original offer to Cole. Jordy Mercer is the only other player who received that amount. Granted, the MLB league minimum has gone up every year, so players in previous years would have had to receive a big increase in salary to get to that amount.

What we can do is look at the salaries of previous years relative to the league minimum that year. In looking at the 2011-2015 salaries, I noticed that not many players had received more than $30,000 more than the league minimum in a given year. Gerrit Cole will get that this year, receiving $33,500 more than the league minimum. The only other two examples I found were Mark Melancon ($31,000) and Andrew McCutchen ($38,000 in his second year).

McCutchen might have gone much higher had he not signed his extension prior to his third league minimum year. At any rate, Cole is the pitching version of what McCutchen was back then, so you’d expect he would see a similar increase. Even so, we’re only talking a few extra thousand dollars here.

But let’s get past the fake $7,000 maximum increase, and the apparent cap of $30,000 to $40,000 over the league minimum, and look at another topic. In the article, Scott Boras said that Cole would have received more with the Mets and the Marlins. This is true.

The Mets paid Matt Harvey $614,125 in his third year of league minimum pay. Granted, Harvey had combined for 11 WAR over the previous two years, while Cole was at 7.7 WAR. But they were both coming off big seasons. Jose Fernandez got an increase to $635,000 in his first full season, after a 4.1 WAR in his rookie year. Interestingly enough, he also got a raise to $651,000 the following year, despite rehabbing from Tommy John.

There are teams who pay a lot more than the league minimum, and the Pirates aren’t one of those teams. And even the salaries offered by the Pirates aren’t nearly as egregious as what the Angels did with Mike Trout a few years ago. Trout was coming off a year where he finished second in the AL MVP voting. His salary reward? A $27,500 raise to $510,000 in his second league minimum year.

The problem with this situation is that nothing will look fair for Gerrit Cole’s production. League minimum is designed to work that way. It gives clubs a huge cost advantage in their first three years of control for a player, and they still get some savings through the arbitration process, compared to what they would pay on the open market. The Pirates could give Cole $600,000, which would be a huge increase compared to what they usually give, and that would be a massive discount for his services (FanGraphs had him at $43.5 M in value last year).

The league minimum system for zero to three players is set by the CBA, which is collectively bargained by the player’s union and the owners. So the players agreed to this system which saves teams money in the early years, and they probably agreed to it because there was some other equal financial tradeoff that they received in return.

One thing about the Boras comment is that the Pirates aren’t required to give Cole an amount because the Marlins or Mets gave similar amounts to similar pitchers. That’s how arbitration works, where Cole would be able to demand and fight for a salary that is comparable to similar players at similar stages. But this isn’t an arbitration process. The CBA only dictates a minimum salary, and a suggestion that a player should be paid similar to what other teams pay their players is going away from what the CBA established.

But maybe there’s something here. If this is a big problem around the game, then the upcoming CBA would be a time to fix it. And maybe a solution to fix it would be a micro scale arbitration process, where players do get paid the same range as players with similar results, while still keeping the salaries low. But this would be difficult to implement, as it would increase the total money for the players, meaning they’d have to give up money elsewhere.

This also still wouldn’t solve the problem of league minimum players being seen as extremely underpaid. Going back to the Trout situation, he did receive a bigger raise the following year, after his second straight year finishing as the runner-up in the MVP race. The salary he received? One million dollars. That seems extremely low for a guy who was one of the best in baseball for two straight years. It also happens to be a non-arbitration record in salary.

League minimum players being underpaid fits in with a common trend in the CBA. Amateur talent saw their prices rising, and the last CBA restricted what they could earn by imposing harsh penalties if teams went over their budgets. Minor league players are criminally underpaid. The whole debate here is over a $7,000 increase for Cole, but almost everyone in the lower levels of the minors makes $7,000 per year or less. (And with that one, I would argue that while Cole should be making more, this is far from the biggest problem of teams underpaying people in their organization.) Then there’s the zero through three guys, who have no control over their salary, and get an extremely small amount, regardless of production.

The CBA is set up to severely restrict the bonuses of amateur players. It then restricts the earnings of players in the minors, and players with zero through three years of service time. So a player drafted out of high school would have his bonus restricted, then would spend maybe five to six years in the minors making less than the minimum wage in this country in most years, and then would have his salary held down for another three years until he gets his first big payday, which comes in the form of another discounted salary. And that continues for his final three years, until he hits the open market and is eligible for that big payday. Lower entry bonus, six years of being paid extremely small amounts, three years of league minimum, and three more of reduced salaries.

Maybe the solution here would be for the player’s union to fight for the smaller guys, rather than fighting to make sure the top salaries in the game continue going up. Because right now there’s a trend where they sacrifice the earnings of 0-6 players, minor leaguers, and amateur players (the last two groups aren’t even in the union and shouldn’t have their rights bargained away), while the best players in the game have gone from making $20+ M a year to $30+ M a year in only a few short years.

The Cole situation isn’t going to look good for the Pirates, because league minimum problems never look good for the team. But this is a weird situation where the Pirates aren’t in the wrong, and Gerrit Cole should definitely be paid more. The problem here is the CBA and the league minimum system. We’ll see if that changes in the upcoming negotiations this winter.

Tim Williams
Tim Williams
Tim is the owner, producer, editor, and lead writer of PiratesProspects.com. He has been running Pirates Prospects since 2009, becoming the first new media reporter and outlet covering the Pirates at the MLB level in 2011 and 2012. His work can also be found in Baseball America, where he has been a contributor since 2014 and the Pirates' correspondent since 2019.

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